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The Department of Defense may be pondering changes in Defense Base Act coverage March 11, 2009

Posted by Aaron Walter in Uncategorized.
Tags: , ,

According to a recent Department of Defense posting, it is seeking comments concerning the future of the Defense Base Act insurance system, which in case you are new to this blog, is a workers’ compensation that covers civilian employees working for companies contracting overseas through the Department of Defense.

For now they are seeking input from the insurance industry and from major defense contractors. Eight possibilities for the future of the Defense Base Act have been proposed, but the DoD is open to other alternative recommendations:

  1. a single-source contract  awarded on a competitive basis issued and administered by the DoD;
  2. a multiple-award contract awarded on a competitive basis issued and administered by DoD;
  3. o change (i.e., contractors are required to obtain appropriate DBA insurance on their own)
  4.  government self insuring for DBA losses while contracting to the private sector for program administrative and claims processing
  5. government self insuring with DoD and Department of Labor (DoL) employees performing all administrative and claims processing
  6. a GSA schedules-type set of maximum rates, which may include awards based on geographic location of the work to be performed and/or based on the nature of the work to be performed, with competition for each major contract (a vehicle structured similar to state-side workers compensation policies)
  7. a pre-qualified list of DoD-approved DBA carriers and brokers/agents who meet a predetermined set criteria/qualifications to provide DBA insurance from which contractors would be required to obtain appropriate DBA coverage
  8. contractors self insuring either on an individual basis or by pooling of contractors, including information on how a panel/pool participant would avoid adverse selection
  9. other alternative recommendations not listed above

Will this mean that AIG may now provide coverage on 100% of all Defense Base Claims?

Will only certain “approved” insurers be allows to offer this insurance and by what criteria will they be allowed to do so?

Or will more insurers get involved in Defense Base Act claims?

Or might it mean that the government could take direct charge and responsibility over this program as they do for direct employees of the federal government (like Postal Workers).  Please read this posing on why our federal government taking over Defense Base Act claims and acting as the insurer AND the judge/jury might be a huge mistake.

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1. hurtin in iraq - April 10, 2009

Thanks for an informative website. I wonder what the DBA says about 3rd party actions, ie if you are suing another party(not employer obvisously) and receiving workcomp payments or settlement. There doesn’t seem to be much information out there about that.


Herb Chestnut - April 10, 2009

Great comment and a great topic for a future post. In short, the DBA does not (and cannot) prohibit suits against a third party who is not your employer or, in some cases, an entity who contracts with your employer. That particular subject can become very complicated. However, where the person or entity responsible for your injury is not connected to your employer, there is no prohibition.

There is a right to subrogation and the comp carrier can file a lien on your recovery. Therefore, please get some advice before considering settlement of your third party claim.

We will try to get a post up in the next two weeks.

Herbert Chestnut

2. jusaguy - May 26, 2009

I haven’t seen a post from Mr. Chestnut on this yet, but it seems like you could sue the third party and then get the carrier to compromise on its lien. I believe that’s how it works in normal workcomp.

Herb Chestnut - May 26, 2009

You are correct. Generally the subrogation lien is subject to negotiation and compromise, especially where the result of the trial is uncertain and there are negotiations to settle the third party claim.

Terry Adkins - November 25, 2009

I was in Iraq over a year ago I came down with respotory and heart problems during my time there. When I contacted AIG they didn’t want to help in anyway , I called the department of labor and they along with another attorney sent me to a person that really cares and is not just in it for the money Herbert Chestnut I truley believe he cares .Thanks to him he settled things with AIG so I can recieve medical treatment now . Him and his staff care and they work fast because time was important . He knew I needed treatment fast .

My name Terry and I am an american living overseas so there in its self was a up hill battle . If anyone of you has exposed to te burnpit there in Iraq write to him at herbchestnut@bellsouth.net or call Mr. Chestnut at Herbert J. Chestnut
Herbert Chestnut & Associates
Attorneys at Law
Alexander Square, Suite 10
328 Alexander Street
Marietta, GA 30060
ph: 770 795 7600
fx: 770 420-2140
let him show you that he cares like he showed me
it doesn’t matter where you live I am prove of that

Sincerly Terry

3. jusaguy - June 30, 2009

Are settlements (like an unscheduled PPD) taxable? And what if I die? Does my spouse continue to get payments.

4. harold - July 1, 2009

Hi, I just wetn through this. I think it’s publication 525 from the IRS. Under most cases, your settlement is not taxable and is exempt from creditors as well. Not sure about death benefits for survivors.

5. Aaron Walter - July 1, 2009

Thanks for the input Harold. I am far from a tax expert but I have never known any Workers’ Compensation settlement to ever be taxed in any way.

If you settle your case and recieve payments over time (maybe as an annuity) your estate would recieve them upon your death. If you are recieving PPD benefits, absent a settlement, your death ends your benefits.

6. Ed - January 11, 2012

Dear All,

Can you please tell me if heart attacks are covered under DBA. I now couple of guys that were driving for one of the US Army contractors, which have both died due to heat attacks. one of the drivers died in Iraq inside one of the camps and the other one died at the contractor yard.
that was a year ago and both families yet to receive any settlements. I have heard that both claims were rejected.

Thanking you in advance

Herb Chestnut - January 11, 2012


Normally in a workers’ compensation setting, heart attacks are closely scrutinized and sometimes difficult to prove. However, due to a couple of favorable portions of the DBA, heart attack claims are more easily proven than in other compensation jurisdictions. Specifically, the presumptions built into the act and the “zone of special danger”, coupled with the long hours, severe temperature and relatively heavy nature of the work involved in Iraq and Afghanistan make proving a causal connection between a heart attack and working environment much easier than a stateside injury.

We would be happy to assist anyone you would like to refer. Please have them call me or Aaron at 800-881-4892

Thank you for your post.

Herb Chestnut

Ed - January 11, 2012

Dear Herb,

This is greatly appreciated. I’ll pass this to both sides of the families. thanks again

Leonard M. Manning - February 14, 2012

Mr. Chestnut,

I can assure you that the DBA did not cover my heart attack with working for MPRI in Afghanistan in 2010. I had been deployed since 2004 in Africa for 2 years, in Iraq for 13 months in 2007, Afghanistan in 2008 – all as an actively serving US Army LTC Engineer Officer. I retired in 2009 and came back to Afghanistan from 2009 until 2010 when I had a heart attack on Camp Black Horse; was moved to Kabul; then to Bagram; and finally to Germany where I received a stint. For the next year I lived out of my savings because nothing covered me, not DBA, not Workmen’s CVpmp, and not the LOngshoremen’s fund. So I would be very interested in hearing further since I was assured I would be covered when I went down while on duty; only to be told later that I wasn’t.
LTC Leonard M. Manning,Retired
currently working back in Afghanistan again

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